​$2.5 million per minute… Internet of Things spending set to skyrocket

Worldwide IT spending is forecast to surpass US$3.6 trillion in 2016, a 1.5 percent increase from 2015, according to Gartner.

The IT industry is being driven by digital business, and an environment driven by a connected world, with Gartner predicting that spending on Internet of Things (IoT) hardware will exceed US$2.5 million every minute in 2016.

In five years, one million new devices will come online every hour, claims Peter Sondergaard, senior vice president at Gartner and global head of Research.

Sondergaard says these interconnections are creating billions of new relationships but are not driven solely by data, rather algorithms.

“Data is inherently dumb,” Sondergaard adds. “It doesn’t actually do anything unless you know how to use it; how to act with it.

“Algorithms are where the real value lies. Algorithms define action. Dynamic algorithms are the core of new customer interactions.”

Sondergaard gave examples such as, Amazon’s recommendation algorithm that keeps customers engaged and buying; Netflix’s dynamic algorithm - built through crowdsourcing - keeps people watching; and the Waze algorithm directs thousands of independent cars on the road.

“The algorithmic economy will power the next great leap in machine-to-machine evolution in the Internet of Things,” Sondergaard adds.

“Products and services will be defined by the sophistication of their algorithms and services.

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